Speculation easing buoys kiwi

Last updated 17:35 14/12/2012

Relevant offers


Kiwi rises on rate hike outlook Kiwi dollar surges Kiwi dollar drops against US NZ dollar dominance continues NZ dollar eyes US86 cents Kiwi pushes through US85 cents RBNZ warning sends Kiwi higher Kiwi starts new week stable NZ dollar rises on euro confidence Kiwi stays firm against US dollar

The New Zealand dollar rose modestly against the greenback at the close of the local trading session with speculation about aggressive quantitative easing by the Bank of Japan helping buoy the currency.

The kiwi recently traded at US84.34 cents, up from US84.23c this morning, while on the Trade Weighted Index of major trading partners’ currencies it was little changed at 75.34 from 75.33 – although the index was hovering near five-year highs.

Traders appeared to be shorting the yen on expectations Japan’s Liberal Democratic Party will win this weekend’s general election, clearing the path for politicians to make good on promises to weaken the currency and get the BoJ to adopt a higher inflation target.

“After marching higher for most of the week, the kiwi spent most of Asian pausing for breath but the positive bias was maintained thanks to further weakness in the yen,” said Mike Jones, a market strategist at Bank of New Zealand.

Investor appetite for risk-linked currencies like the kiwi was also supported by Chinese data which showed business sentiment continued to improve in December, with HSBC's Purchasing Managers' Index gaining 50.9.

The figures mark a 14 month high, further adding weight to the view the slowdown in the world’s second biggest economy has bottomed out, and it is starting to pick up pace again.

On the crosses, the New Zealand dollar rose to 80.07 Australian cents, up from 80c this morning, and it gained to 70.75 yen from 70.52 yen. The kiwi slipped to 64.45 euro cents from 64.52 euro cents, and it was little changed at 52.33 pence from 52.30.

Ad Feedback

- BusinessDay.co.nz

Special offers

Featured Promotions

Sponsored Content